2025 Revised Return Review (post-SEHI)
CPA sent the revised 2025 1040 with the Medi-Share SEHI deduction included (resolving the discrepancy we caught in the original draft). This doc captures what the revised return shows, where the delta from our initial estimate came from, and the retirement-contribution analysis the CPA prompted.
Revised return numbers
| Line | Description | Amount |
|---|---|---|
| 1z | Wages | $176,250 |
| 2b | Taxable interest | $1,934 |
| 3b | Ordinary dividends | $4,844 |
| 7 | Capital gain/loss | ($519) |
| 8 | Sched 1 income (S-Corp K-1) | $101,443 |
| 9 | Total income | ~$283,952 |
| Sched 1 L17 | SEHI deduction (Medi-Share) | $9,425 ✓ |
| 11 | AGI | $274,527 |
| 12 | Standard deduction | $31,500 (worth asking CPA — 2025 MFJ standard is $30,000) |
| 13 | QBI deduction | $18,414 |
| 15 | Taxable income | $224,613 |
| 16 | Tax | $39,351 |
| 19 | Child tax credit | $2,200 |
| 20 | Foreign tax credit | $184 |
| Sched 2 L12 | NIIT | $238 |
| 24 | Total tax | $37,205 |
| 25a | Fed W/H | $22,693 |
| 26 | Estimated payments | $12,800 |
| 37 | Amount Owed | $1,718 |
Delta from our initial estimate
- Our estimate: ~$1,145 owed
- CPA revised: $1,718 owed
- Delta: +$573 (~1.5% of $37K total tax bill — within manual-estimate noise)
Most likely sources of the delta:
- NIIT of $238 — we probably didn't model the Net Investment Income Tax on dividends/interest. 3.8% surtax above $250K AGI for MFJ.
- Minor QBI calculation edge cases above the phase-out threshold ($383K taxable for MFJ in 2025)
- Qualified-dividend preferential rate nuances on the $4,844 in divs
Open question for CPA: the $31,500 line 12 standard deduction is $1,500 above the published 2025 MFJ standard ($30,000). Could be a worksheet adjustment, but worth confirming.
Verdict: the return reconciles cleanly. Nothing looks wrong; the delta is noise.
Retirement contribution analysis
CPA asked about SEP IRA, IRA, or Roth for tax savings.
Math for wiping out the $1,718 bill
At ~24% marginal rate (deep into the 24% bracket at $224K taxable): $1,718 / 0.24 ≈ $7,158 of deductible contributions would zero the federal bill.
Options considered
SEP IRA — the right tool, blocked by timing
- 25% of W-2 wages = ~$12,812 max (on ~$51,250 S-Corp W-2)
- Contribution is an S-Corp business expense — reduces K-1 pass-through
- Blocker: Ray Data LLC business return is already finalized. Can't reopen it to add a SEP contribution as an expense.
- This is the lesson for next year: establish SEP IRA or Solo 401(k) early in the tax year so the S-Corp has the option during filing.
Traditional IRA — ambiguous, probably phased out
- $7,000/person limit
- Deductibility depends on whether Michelle is covered by Perez Eye Center's 401(k) (check her W-2 box 13)
- If she IS covered, full phase-out at $274K AGI → zero deduction for both
- Even if usable, it's a smaller lever than SEP
Solo 401(k) — plan had to exist by 12/31/2025
- Employee deferrals require the plan to be established by end of tax year
- Employer-only (25% of W-2) contributions can still be added via the extended S-Corp return, but we can't do that either since the business return is final
Roth IRA — phased out
- MAGI $274K > 2025 MFJ Roth phase-out ceiling of $246K
- Backdoor Roth is available but doesn't save current-year tax
Founder's decision (2026-04-10)
Pay the $1,718 and move on. Near-term cash is the priority over long-term retirement savings at this moment. Saving ~$5K of cash flow (the difference between a $7,158 contribution and the $1,718 bill) beats deferring $1,718 of tax when the personal return is still pending and the business return is locked.
Not tax-optimal, but cash-flow-optimal given current priorities. Conscious trade-off, logged.
Lessons for 2026 tax prep
- Establish SEP IRA or Solo 401(k) for Ray Data LLC in Q1 2026 so the 2026 tax year has the option available when the business return is prepared. Open the account at Schwab or Fidelity (both same-day), fund with $0, leave room to contribute when 2026 taxes are prepared.
- Ask CPA about Michelle's W-2 box 13 status early — determines traditional IRA deductibility and affects future retirement planning decisions for both of us.
- Model NIIT in our tax estimator — the 3.8% surtax on investment income is a line item we missed. On $6,778 of investment income above the AGI threshold, it's $238. Easy to bake into future estimates.
- Track the standard deduction as published rather than assumed — the $31,500 vs $30,000 delta would have been caught if our estimator used the current year's actual number from a reliable source.
Related
- [[cpa-handoff]] — the handoff doc for the CPA
- [[document-summary]] — source-document index
- [[../../../06-reference/2026-04-10-claude-code-monitor-tool]] — unrelated but adjacent vault entry from today
- [[../../../../02-sops]] — add "SEP IRA setup" to Q1 2026 SOPs when we get there